Sinking Nvidia keeps Wall Street’s gains in check

Most of Wall Street is rising on Tuesday, but another return toward Earth for Nvidia is keeping the U.S. stock market in check.

The S&P 500 edged just 0.2% higher, despite gains for the majority of stocks within the index. It’s a slowdown for the market, coming off Monday’s vigorous rebound following its first losing week in four.

The Dow Jones Industrial Average was up 483 points, or 1%, as of 2:01 p.m. Eastern time, and the Nasdaq composite was 0.2% lower. All three are still near their all-time highs but have been shaky recently.

Much of the focus was on Nvidia and other winners of the artificial-intelligence frenzy, as usual. Their sensational growth has been one of the top reasons the U.S. stock market has hit records despite a slowing job market and still-high inflation. But their prices have shot so high that critics say they look too expensive and are reminiscent of the 2000 dot-com bubble that ultimately burst and nearly halved the S&P 500.

Nvidia sank 2.4% after SoftBank, a Japanese technology giant that had been a major investor, said it had sold its entire stake last month for $5.83 billion. SoftBank is not giving up on AI. It’s still focusing on OpenAI, the maker of ChatGPT.

Because Nvidia is so large, worth close to $5 trillion, it was the heaviest weight on the S&P 500 Tuesday and checked gains made elsewhere in the market.

Nvidia oftentimes can dictate the movement of index funds that track the S&P 500, which sit at the heart of many 401(k) accounts. A day earlier, Nvidia’s rally of nearly 6% was the biggest reason the S&P 500 erased nearly all its loss from last week.

CoreWeave, whose cloud platform helps customers running AI workloads, fell 14.8% Tuesday even though it reported a smaller loss for the latest quarter than analysts expected. Its revenue also topped expectations, and financial analysts praised its momentum. But investors seemed to focus instead on supply-chain issues delaying a data center and pushing some of CoreWeave’s revenue further into the future.

On the winning side of Wall Street, BigBear.ai jumped 10.9% after reporting better results for the latest quarter than analysts expected. It also said it would buy AskSage, a generative AI platform built for national-security agencies and other highly regulated areas, for $250 million.

Outside of AI, Paramount Skydance climbed 9.4%, even as the entertainment giant fell short of Wall Street’s revenue and profit targets. It was the company’s first earnings report since Skydance closed its acquisition of Paramount in early August, and investors were apparently encouraged that it raised its 2026 cost-cutting goal to $3 billion from the previous $2 billion.

In stock markets abroad, indexes rose in Europe following a mixed finish in Asia.

Japan’s Nikkei 225 slipped 0.1% even though SoftBank climbed 2%. Besides the sale of its Nvidia stake, the tech giant also reported a much bigger profit than analysts expected.

In the U.S. bond market, trading is closed for the Veterans Day holiday.

Yields have been generally rising since Federal Reserve Chair Jerome Powell warned last month that further cuts to interest rates are not assured. The Fed has already cut its main interest rate twice this year in hopes of shoring up the slowing job market. But it’s worried that inflation, which has stubbornly remained above the Fed’s 2% target, could reaccelerate.

What’s potentially making the Fed’s job more difficult is that the U.S. government’s shutdown has delayed important updates on jobs and other areas of the economy. The Senate has made moves to end what’s become the longest-ever shutdown, but it’s not assured.

That has left the Fed and investors looking at reports coming from sources outside of the government, which have offered a mixed picture.

A job tracker at Goldman Sachs suggests growth slowed in October from September. After including the effect of a deferred resignation program at the government, U.S. employers overall may have cut 50,000 jobs in October, according to economist David Mericle.

Such softening in the job market has traders betting on a roughly two-in-three chance that the Fed will cut interest rates at its next meeting in December, according to data from CME Group. Expectations for such cuts, which Wall Street loves because they can goose the economy and investment prices, are another reason stocks have hit records recently.

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AP Business Writers Chan Ho-Him and Matt Ott contributed.

This story was originally featured on Fortune.com